Keep an eye on beaten-down shares of Enphase Energy (ENPH).
After finding double bottom support at around $60, the solar stock is again showing signs of life. From its current pried of $66.25, we’d like to see ENPH retest $75 initially. Helping, analysts at Canaccord just upgraded ENPH to a buy rating following earnings and noting that it sees significant opportunity to expand gross margins.
“The market for solar equipment in the US is clearly showing signs of life following three consecutive quarters of revenue growth for Enphase and we believe the company’s reshoring of its microinverter/ battery manufacturing capabilities not only have protected the business in the event of a potential trade war, but also represent a significant opportunity to expand gross margins,” said Canaccord, as quoted by CNBC.
Analysts at Oppenheimer upgraded ENPH to an outperform rating with a $133 price target.
“Oppenheimer suggests that the investment community will likely shift its attention to the company’s channel inventory, demand levels, and competitive environment. The firm anticipates that a more achievable baseline for sales and margins has been established, which could lead to future outperformance,” as noted by Investing.com.
Earnings were also solid.
In its fourth quarter, the company reported EPS of 94 cents, which beat by 19 cents. Revenue of $382.7 million, up 26.5% year over year, beat by $5.2 million. Citi analysts added that the company beat expectations for the first time in nearly two years, with gross margin above guidance from Inflation Reduction Act credits, as noted by Seeking Alpha.
Moving forward, the company expects to see revenues of $340 million to $380 million, which is above estimates of $337.5 million.
Sincerely,
Ian Cooper
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